EIA Data Squashes Hope of Large Drawdown in WTI Crude Inventory (USO) (OIL)

United States Oil ETF (NYSE: USO) moved higher early Wednesday following EIA inventory data. This week's storage report showed a decline of 964 thousand barrels compared to estimates calling for a decline of 1.75 million barrel. API data on Tuesday showed inventories dropped 4.1 million barrels, the largest decline since late August. This caused some investors to become bullish on WTI, though gains were pared heading into the EIA report.

Aside from inventory data, oil trader are also focused on fiscal cliff drama in the U.S. Oil's reaction to headlines out of Washington has been somewhat subdued relative to equity markets. However, with economists cautioning of recession if talks breakdown, oil’s stake in the game is clear. Overall, investors are optimistic discussions will ultimately lead to a favorable outcome and a pickup in economic activity in the U.S.

United States Oil ETF (NYSE: USO) is higher by 1.6 percent following the EIA storage data. iPath S&P GSCI Crude Oil Total Return ETF (NYSE: OIL) is higher by a similar amount.

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